The balanced scorecard and decision strategies: What roles do outcome effects, framing biases and explicit weights play in the balancing act?

摘要

The Balanced Scorecard is a managerial accounting tool that aligns a company's strategy by balancing both financial and nonfinancial performance measures in decision making. The purpose of this dissertation is to examine whether outcome effects and framing biases prevent this balance and if weights on the financial and nonfinancial criteria improve decision making. I study how these variables impact decision strategies using a previously-derived index. This index measures the level of compensatory processing for each subject.; In the experiment, seventy-eight MBA students complete one practice case and two experimental cases: a control case and a treatments case. In the treatments case, I manipulate whether a financial or nonfinancial performance category is above target (favorable outcome) or below target (unfavorable outcome). I also present explicit weights to half of the participants. I find evidence of outcome and framing effects in Balanced Scorecard decisions, especially in the unfavorable financial treatment conditions. Subjects in unfavorable financial treatments tend to exhibit significantly lower levels of compensatory processing than subjects in the favorable financial condition. Subjects in nonfinancial favorable and unfavorable outcomes do not exhibit different levels of compensatory processing.; I also discover that subjects in nonfinancial treatment conditions who also receive weights employ very low levels of compensatory processing. This is an important finding since organizations currently use weights in Balanced Scorecard administration and academic research alludes to the idea that explicit weights improve decision, when actually, my results suggest the opposite.; These results have implications for accounting and information processing research as well as accounting practitioners and organizations who have implemented or will implement the Balanced Scorecard. To my knowledge, I am the first to show that favorable and unfavorable outcomes interact with the processing of financial information and the first to show how effectively the previously-derived index can be in decision making research. Moreover, because numerous U.S. and foreign firms use the Balanced Scorecard, knowing how decision makers react to this managerial tool can help improve its effectiveness.